Auto Loan Calculator
Price, down payment, trade-in, rate, term: see your real monthly payment, total interest, and what the car truly costs before you sign anything.
Last updated: October 2026
Loan details
Amortization schedule (yearly)
| Year | Interest paid | Principal paid | Balance |
|---|---|---|---|
| Enter your details and click Calculate. | |||
How auto loan payments work
An auto loan is an amortizing installment loan: you borrow the amount financed and repay it in equal monthly payments. Each payment first covers that month's interest (charged on the remaining balance), and whatever is left reduces the principal. Because the balance shrinks over time, early payments are interest-heavy and later payments are almost all principal.
The amount you actually borrow is smaller than the sticker price. Your down payment (cash you put in) and your trade-in value (what the dealer credits for your old car) both come straight off the price before the loan is calculated. On a $35,000 car with $5,000 down and a $3,000 trade-in, you finance only $27,000.
The amortization formula
Lenders compute the fixed monthly payment with the standard amortization formula:
Here P is the amount financed, r is the monthly interest rate (APR divided by 12), and n is the number of monthly payments. The calculator above runs this exact formula, then simulates every payment to build the interest and principal totals in the schedule.
Worked example
Take a $35,000 car with $5,000 down and a $3,000 trade-in, financed at 6.5% APR for 5 years (60 payments):
Amount financed: $35,000 − $5,000 − $3,000 = $27,000. Monthly rate r = 0.065 / 12 = 0.005417. Plugging into the formula gives a monthly payment of $528.29. Over 60 payments you pay $31,697.16 total to the lender, of which $4,697.16 is interest. Add back your $8,000 of down payment and trade-in value, and the car truly costs $39,697.16.
Now stretch the same loan to 7 years at the same rate: the payment drops to about $401, but total interest climbs to about $6,679, over 40% more. That is the term trade-off every buyer should see before signing.
Down payment and trade-in: the two levers that matter
Every dollar of down payment or trade-in value is a dollar you neither borrow nor pay interest on for years. A 20% down payment is the classic target because it keeps you from going upside down (owing more than the car is worth) as the car depreciates. Cars lose value fastest in the first two years, so small down payments plus long terms are the recipe for owing $25,000 on a car worth $19,000.
Trade-ins deserve the same attention as the purchase price: get an independent quote (online buyers publish instant offers) before you let the dealer set the number, because an undervalued trade-in is just a hidden price increase.
The long-term trap: 72 and 84 month loans
Dealers push 72 and 84 month terms because the payment looks affordable, but the math is brutal: you pay far more interest, you stay upside down for most of the loan, and you can still be making payments after the car needs major repairs or replacement. As a rule, keep auto loans to 60 months or less. If the payment only works at 84 months, the car is too expensive, not the term too short.
Auto Loan FAQs
How is my car payment calculated?
With the amortization formula M = P × r(1+r)^n / ((1+r)^n − 1). P is the amount financed after down payment and trade-in, r is the monthly rate (APR / 12), and n is the number of payments. The calculator above applies the same formula lenders use.
How much car can I afford?
A widely used guideline is the 20/4/10 rule: put 20% down, keep the term to 4 years or less, and keep total car expenses (payment, insurance, fuel, maintenance) under 10% of your gross income. Enter any price above to see the payment it produces.
Is 0% APR dealer financing really free?
The loan charges no interest, but 0% offers usually replace a cash rebate, so you pay a higher purchase price. Compare the 0% deal against the rebate price financed at a bank or credit union rate, and pick whichever total cost is lower.
Should I make a bigger down payment or keep the cash?
A bigger down payment means borrowing less and paying less interest, and it protects you from going upside down. Keep an emergency fund intact first, though: draining savings to put 30% down and then borrowing at credit card rates for a repair is worse.
What does it mean to be upside down on a car loan?
Owing more than the car is worth. It is common with small down payments and long terms because cars depreciate fastest early on. If the car is totaled or you must sell, the gap comes out of your pocket. GAP insurance covers the difference, but shorter terms and bigger down payments prevent it.
How does my trade-in affect the loan?
The trade-in value reduces the amount financed dollar for dollar, exactly like a down payment. Get an independent quote before visiting the dealer so you know whether their offer is fair; a lowballed trade-in is a hidden price increase.
Is a 72 or 84 month auto loan a bad idea?
Usually yes. The payment looks small but total interest climbs sharply, you stay upside down for years, and you may still owe money when the car needs replacing. If a car only fits your budget at 84 months, it is too much car.
Can I pay off my car loan early?
Yes, on almost all auto loans, and extra principal payments shorten the loan and cut total interest. Confirm yours has no prepayment penalty first (rare, but check), and make sure extra payments are applied to principal, not just treated as early future payments.
Will shopping for auto loan rates hurt my credit score?
Rate shopping inside a short window, typically 14 days, counts as a single inquiry for scoring purposes. Compare banks, credit unions, and the dealer's offer without fear; it is applications spread over many months that drag a score down.
What fees get rolled into an auto loan?
Common ones: documentation fees, extended warranties, GAP insurance, and add-on products like paint protection. Anything rolled into the loan accrues interest for the full term, so question each line item and consider paying fees in cash instead of financing them.